Dr. David Simchi-Levi of MIT is on his entrepreneurial game again, launching a new Cloud-based platform for operation and supply chain analytics.

The new company, called Opalytics (short hand for "operational analytics"), launches with four packaged supply chain solutions, but interestingly will also be marketed as a platform for other technology vendors and supply chain practitioners to develop their own solutions using the Opalytics tool sets.

SCDigest Says:

In addition to the Gurobi-based solver technology, Opalytics' platform offers a variety of other tools to develop analytics applications, from a secure user interface to data management and data visualization.

A number of years ago, Simchi-Levi started a company called LogicTools, which provided supply chain network design and multi-echelon inventory optimization software. That company was sold to a European firm called ILOG in 2007 and then ultimately to IBM, which just this year itself the sold former LogicTools business to LLamasoft.

More recently, Simchi-Levi started a consulting company called OpsRules, leveraging off the insights and practices detailed in his successful book "Operations Rules: Delivering Customer Value through Flexible Operation," which persuasively argued supply chains could be engineered using proven principles and strategies.

Now comes Opalytics, which will be managed by Simchi-Levi and his wife Edith Simchi-Levi. Also on the team is Pete Cacioppi, formerly chief scientist at LogicTools who then also spent some time at IBM.

David Simchi-Levi told SCDigest this week that this new platform will come with four available applications:

• Supply Chain Segmentation, a tool that will enable companies to classify and cluster suppliers, customers and more in innovative ways and ultimately predict behavior. That includes optimizing pricing for on-line retailers. A key aspect of the Opalytics segmentation solution is its use of "machine learning" technology to continuously improve results.

While network design and inventory optimization are well established tools, Simchi-Levi says the power of the Cloud to deliver these solutions is a real difference maker over traditional software in these areas, allowing for rapid development of supply chain models, easy access to the tools for users across the globe, and the ability to easily scale applications to meet challenging performance requirements.

The pricing optimization software is an example of a solution that almost requires this Cloud-based approach because it can be very processing intensive, Simchi-Levi told SCDigest. With a Cloud-based approach, multiple computers can be leveraged handle the processing requirements and thus deliver almost limitless scalability.

"You are talking about hundreds of thousands of products that need to be price-optimized a couple times per day," Simchi-Levi said, referring to one international retailer Opalytics is currently working with. "You aren't going to do that on a PC-based application," he added.

The Opalytics platform runs on Amazon.com's AWS Cloud technology. The solutions will be sold on a subscription pricing basis, Edith Simchi-Levi told SCDigest.

Analytics Development on the Platform by Other Companies

In addition to the four packaged applications Opalytics, the company will make its platform available to other companies to build their own analytic applications. That could be other technology providers, or operations research or other functions in regular companies.

Simchi-Levi says that because the Opalytics platform is built on the Cloud with all the latest technologies, it may be much easier for other companies to develop and maintain analytic solutions than using their existing, internal platforms.

Opalytics uses the Gurobi optimization engine, developed by the same people that earlier built the well-known and highly adopted CPLEX optimization tool many years ago.

In addition to the Gurobi- based solver technology, Opalytics' platform offers a variety of other tools to develop analytics applications, from a secure user interface to data management and data visualization.

SCDigest's take: The four packaged applications from Opalytics provide an interesting mix of existing solutions (network design and invetory optimization) on a Cloud-based platform combined with two other more new-to-market solutions, providing a unique set of capabilities.

That story is compelling enough on its own, but the potential for companies to leverage the platform to create their own optimization and analytic applications could not only provide a better path for internal operations research groups, it could actually help reverse the general trend towards less investment in these areas by delivering faster and stronger payback from such analytic efforts.

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